It doesn't help that the Post's website is ugly and takes forever to load, especially on my phone.
And Ezra has always been a relatively dry writer. Working for the Post's business section has exacerbated that tendency.
Wonkblog's good -- high-quality information -- but it's every bit as entertaining as the name implies.
The Post's website pretty consistently crashes my browser. I would actually be a more regular reader of Klein if it didn't.
Ezra Klein is one of the most brilliant persons I have ever encountered, albeit at a distance, and watching his ascent over the last decade has been a daily wonder. I could not begin to describe how amazing, interesting and informative I find him, in his daily work and the trajectory of his career. For me, Klein and Obama are the stories of the century so far, showing not who, but what has triumphed in its most accomplished manifestations.
I imagine that the piece will function as a kind of baseline argument for critiquing the Obama administration on the economy from the liberal wonkosphere corner of the blogosphere.
To say Klein creates the "conventional wisdom" of "neo-liberal" narrative on a daily basis is to vastly underestimate how unassailable his accounts will become. He's running the place and writing the history.
My car wouldn't start and Ezra walked up, offering to help. He snapped his fingers. The car started and has now run for ten years straight without even needing me to refill the gas tank.
It may be a shallow reason, but I stopped reading when they began relying on "read mores". Also, tbogg.
Mike is great and I had intended to link to that piece that Bob did in 3 as well, and also the Ezra Klein piece it comments on. It's sort of jaw-dropping to see neoliberals advance the argument that "hey, we can't be expected to be equal to this kind of crisis" and expect people to buy into it. Talk about surrendering the field to the radicals on the other side!
Matt deserves credit for leaving the Atlantic to go to Think Progress. CAP is too tied into establishment liberalism, but it is still very active in the fight and Matt was choosing a side by doing that.
Klein reminds me of Joseph and Stewart Alsop (who ensured Kennedy and LBJ had no choice but escalation in Vietnam) in the 50s and 60s, and of course David Broder. Maybe Winchell. Henry Adams?
Klein will be there for forty years after Obama and McConnell have been dismissed to the peripheries. Washington will be "Klein's town" much as it was Sally Quinn's.
How will he do it? How will he exercise this power?
He will serve the center unselfishly and without ambition or egotism, and thereby define the center without really even knowing he is the one doing it.
I heard Ezra Klein has, like, 30 goddam dicks.
I used to find his media criticism really interesting, and I'm sad that he doesn't seem to be in a position where he can do that any more. (Unless I'm wrong about that - I, too, don't read him religiously any more.)
Also on the "bored by Wonkbook" bench. I catch up with it once or twice a week, but while I can see that it's chock-full of information, I can very rarely figure out why it's information that I have any reason to know. I can't think of when a Wonkbook post has either changed my mind on an issue, strengthened my belief in a position that I was shaky about, or brought something that I recognized as important to my attention that I hadn't known about. (Or amused or entertained me, but obviously he's not going for that.)
6.1:But if you read the Konczal and Krugman critiques of the Klein piece, they still genuflect in his direction. Really, Krugman can more easily show contempt for Obama, and has, than Klein.
Countering Klein is already like saying "But there is a good alternative to capitalism!" or "We don't have to fight communism."
He is not just re-inforcing the received wisdom, he is creating the comfortable unconscious, the emotional substructures from which the basic assumptions arise.
And that is how to read him, looking for the emotions he is working on rather than the rational arguments he is working with.
The problem with the Alsops, or Schlesinger in the 60s, was that they were so fucking reasonable, humble, and nice guys.
You are all the Albert Brooks character in Broadcast News (and Holly Hunter).
Russell Arben Fox on Naomi Klein, Global Warming, and liberal technocrats.
I'm less worried about bloggers becoming "organs of the Democratic party" and more worried about them becoming "organs of the journalistic establishment." That is, I'd rather have my bloggers co-opted by CAP than by the Washington Post. At least Ezra still mostly prioritizes research over reporting, but for the most part I think he's become a journalist (i.e. someone who cares more about playing the rules of the made-up game of journalism than about the truth).
I had a year where I was very busy and so stopped reading political blogs (other than Yglesias, which I couldn't stop). I was kinda shocked that when that was over Kevin Drum ended up back on my RSS while Ezra Klein I haven't missed at all.
10, 11: You went in search of people who weren't nice and found RAF?
Klein is like the young Kristoff in being a fresh-faced country boy. Pleasant and respectful. There still is a Heartland quota. I might have benefited from it, I was recruited by the neocons while still in HS (fact) but the pleasant and respectful part was missing. My son got a few Heartland points for college admission, but he couldn't stand being on the East Coast.
Edmund Wilson's
"A clean and clever lad who is doing his best
to get on" covers lots of people.
Read more: http://www.time.com/time/magazine/article/0,9171,790711,00.html#ixzz1axYYqkgD
While Klein was still blogging he published a blatantly reasonable "on the other hand" piece, and I predicted that he was on the way up. Within a month he was hired.
It's to Sausagely's credit that he hasn't been promoted yet.
I got fed up with the Post back in 03/04. Drastically cut back on political blogs in 09 or so, for more or less the same reason: way too much of the Village thing.
I think Bob is right about where Klein is going. A fine journalistic career, important in the Village. Forming and being imprisoned by Village views.
BTW, the Ezra Klein piece linked through Mike Konczal is really excellent, the single best tour I have ever seen of why the Administration feels it did the best job it could and our current crappy situation is the Best of All Politically Feasible Economies Given Circumstances in January 2008. The way he then leads you to the sorrowful conclusion that they might be right is why Bob is saying that he's so brilliant as the official court scribe of the establishment liberals. (Though I would compare him to a smart, wonkier Bob Woodward rather than a dark Cold War figure like Alsop). The thing is, I'm not so sure they're wrong either...but I damn sure do know that we need a lot more people out there expanding the range of policy options that can at least be considered within the system. Ezra is for sure not one of those people, makes no effort to be and doesn't seem to want to be. The sources he reaches out to invariably read like the guest list to a chin-stroking Brookings event.
And what am I saying....I do know the Administration could have done better, and how...one reason that Klein piece is so good is that references to those moments are scattered all through the piece but are subtly deemphasized (and in some cases key things are left out, like that the Administration probably could have had cramdown in the stimulus but was afraid of destabilizing the banks). Of course a big thing that is left out is the level of priority given to propping up the banks as a core concern in economic policy.
Mesmerized by Ezra...he is good, if you're one of the 2 percent of people who cares about boring wonky shit.
Blogs were most interesting in the two or three weeks before there arose blogging about other people blogging incorrectly about blogging.
For some time now, the question for me hasn't been how to make things better or how to make things right, but how to cope with the oncoming decline. I've gotten down to the level of inventorying my family members for relative viability. People like Scott Lemieux and Ezra Klein who assure us that Nothing Better Could Have Been Done may be right, but I suspect that their willingness to accept failure was enabled by their underestimate of how bad things will be, and possibly by a feeling of personal safety.
The decline I expect is not apocalyptic. Just a slow descent and gradual piecemeal unravelling enlivened by scattered episodes of viciousness that may not affect me personally at all, sort of the way a car gradually becomes a beater that uses a quart of oil a week and a gallon of water every fifty miles.
Mmmhm. My biggest political stress in my personal/political life is to keep on checking what I think I need to do to keep my kids safe/prosperous/viable against what's right.
I decree that heartlandness is now measured by proximity to Independence Hall in Philadelphia.
My biggest political stress in my personal/political life is to keep on checking what I think I need to do to keep my kids safe/prosperous/viable against what's right.
Mine is that I find it too stressful to pay close attention to politics.
Back on the original post, I thought Drum was underrated before it was cool to think he was underrated. I think there's always been a tendency to read his emotionally moderate style as indicating the bad kind of 'moderation' in his politics. But while he's certainly gotten things wrong, I don't remember him doing much (since the beginning of the war, and he did start opposing the war before the invasion) of 'moderately' splitting the difference between something reasonable and something insane.
Drum has always been good about keeping union and equality issues central.
14: Kristoff is quasi-rural Oregon. I got Klein wrong. I guess someone else is from Montana. A whole meme destroyed just like that. Popper would be happy.
24 and 25 get it exactly right. The fact that Drum is significantly older than Klein, Ygqkeilesuisas, and many of the other "star" early bloggers is probably also a factor in the (wrong) perception that he was ever to the right of either of them.
You are all high. Ezra Klein was always boring, the most boring of all high-profile liberal bloggers. Back in the early days, I saw some list of the highest-traffic liberal blogs. At time time I read all of them except for Pandagon -- back when it was just Klein and Jesse Taylor. I thought "maybe I should read this one too,' but I gave up because it was so boring. If you had asked me then to guess which of those high-traffic bloggers would someday work for the Washington Post, I would have guessed Klein right off the bat.
Klein and Yglesias both suffer from the problem that they don't known anything first-hand. Drum is older, and has worked some random variety of jobs, so he's in a better position to understand both how much things have changed for the worse, and how incompetent the policy response has been.
I thought Orange County was about as heartlandy as you could get in CA -- affluent rightwing suburbia? But maybe I'm confused about the connotations of heartland; should I be thinking rural poverty?
Also, 4 is, unsurprisingly given the author, hilarious.
Drum also has the advantage of living in the political future (i.e. California), which makes it easier to be prescient.
29: I thought that Heartland had to mean non-coastal. There's nowhere in California that could be Heartland.
Comparing Klein to, say, Wittes, shows his elevation to be a huge improvement for civilization.
I was all wrong about Klein. Not Heartland. It was some other freshfaced guy from Montana.
Heartland is non-coastal, preferably non-urban, and white. Probably Southerners have their own quota.
One of the things I admire about the shadowy figures behind the right-wing is the way that they'll simply change language when it suits them. If it was better for them to redefine "heartland" to mean "Manhattan", they would have done it already it.
My memory is that the first bloggers promoted were Jonah Goldberg, McMegan, and Wonkette, the one who wrote about buttsex. Not auspicious.
38: Josh Marshall was the first of whom I was aware; I think I caught on, somehow, in his second or third week.
I'm starting to wonder if the health reform saga made Klein seem a better blogger than he really is, because there were so many complex moving parts that he was uniquely equipped to explain it all to us.
Isn't Josh still independent? He may have had op-eds in the major media I guess.
I was thinking of "promoted" as going pro from amateur status, rather than being adopted by an established entity; he's still his own master, as far as I know.
Apparently "heartland" is a polite way of saying "methland".
44: I tried calling flyover country the "Meth States" for a while.
I was thinking more of people being taken into the Establishment (Village). That's a weird, weird, list I gave.
Quite a few people are doing OK as entrepreneurs, though you also have people like Politico , which is traditional hacks horning in on blogger turf.
Klein and Yglesias both suffer from the problem that they don't know anything first-hand.
This is the most succinct and accurate criticism of an entire generation of political/policy bloggers that I have seen in ages.
It explains perfectly why I periodically end up in a sputtering rage when I read these guys, reduced to an inchoate reaction of "But they HAVEN'T DONE ANYTHING!!!!"
Despite the thousands of legitimate criticisms of the old journalism, one side effect of the dues-paying was that by the time you ascended to David Broder territory, you had spent some in the trenches having to actually do reactive work, rather than the permanent luxury of autonomous, pro-active work.
46: The first Wonkette, Ana Marie Cox, had a not-insignificant career as a writer and editor before she took the King's Nick Denton's shilling.
Bakersfield is The South.
It's more a mixture of The South and The West, really.
Isn't Josh still independent?
TPM got a big shot of funding/investment from some organization or other maybe a year ago or so. Don't recall who it came from, but I'm assuming it's how they're able to expand operations, add reporters and so on. TPM feels to me as though it's a bit more Breaking News!!!! oriented now than it once was -- with a concomitant drop-off in attention to ongoing issues -- but I could be wrong. I vaguely wonder at times whether it's headed in the direction of a Politico (caveat: I don't read Politico regularly so I could be wildly off-base).
Sort of topically, I had reason to go to downtown today and was right by the OccupyPittsburgh encampment. Seemed to have a nice crowd and various people honking in support. There were also enough people my age standing around with cameras and whatnot that it looked a bit like the occupiers were exhibits in a zoo. The fence put up, I assume by the owners of the lot, tended to support that effect. Anyway, not feeling like I could think of a useful way to interact, I went back about my business of find enough quarters to feed a 25 cents/5 minute meter.
47: It explains perfectly why I periodically end up in a sputtering rage when I read these guys
Who else do you have in mind besides Klein and Yglesias, Witt?
Ironically, I find that as TPM has become BIGGER! and BETTER!, it has become more dispensible. Speaking as a loyal reader who has read probably 90 pct of the front page posts that have ever appeared on TPM, I wonder sometimes lately why I still bother. Mind you, I think Josh deserves canonization for his role in mobilizing against Social Security privatization in '05, but lately his whole site seems somehow peripheral to the conversation.
I've felt that way a bit about OWS -- I sort of wander vaguely through on my way to and from work, and figure I'm making the crowd look a fraction bigger, but I'm not sure how to signal that I'm being supportive. I suppose I could make a sign.
You could donate something - they had a jar for that in SF.
I sort of felt like everybody would figure I was a cop or a reporter or a blogger.
W/R/T Klein, I agree that he has is a less interesting read since joining the WaPo, but the gain to journalism is greater than the loss to blogging. Especially now that he has Brad Plumer and the other couple of hotshots in his stable, I'm confident they will get some big stories into circulation that the old WaPo would have ignored or never been aware of.
For an instructive comparison, see what Dana Millbank has become since he went to the Post. You'd never believe he used to do excellent reporting when he was at TNR. With Klein, you can still see the liberal blogger roots.
55: A facebook friend of mine mentioned recently that she's been regularly bringing them toothpaste and soap, and is going to try to determine what they'll need as colder weather sets in.
56: I suppose. They tweeted that they have enough food and tents but need batteries for Mac books. That seemed comfortably far down the hierarchy of needs for me to see maybe if they don't have more important needs later.
Is "I have a good job and Wall Street still terrifies and angers me. I'm employed for now, but I'm still in the 99%." too wordy for a sign?
"I'm employed for now, but I'm still in the 99%." That'll fit.
The problem I've had with TPM as it's expanded is that the front page isn't as useful without reading the various inside pages and I generally don't have enough interest in what's going on right now - in the right up to this minute sense, not general current events - for that.
"Lawyers can be people in the 99%, too."
That sounds much better. Possibly I will make a sign, and put in some morning and afternoon time hanging out.
63: Yup. Website design is very, very important to what I will bother to read online, and TPM has a tendency to bounce me off.
60: The batteries for Mac books goes toward the need/desire to get the word out, which is essential to the project, so.
For signs at OWS, I'm more attracted to a simple "Our income inequality is unacceptable" kind of thing. Can I squeeze in something about how it's also unsustainable? And immoral? Too wordy?
66: I assume they're trying to up the numbers for page hits by putting a "read more" link which goes to an expanded piece that only adds 2 more paragraphs. Annoying, time wasting. But goes toward selling advertising by being able to show page hit numbers. It's too bad; I'm not sure what other model is out there if you're trying to bootstrap yourself into a larger operation, though.
Anyway, as a result, I click through to the full 'article' much less often than I once did.
The thing about Klein and co is that they would've made it without the blogging as well. Had he been born a decade earlier he might have worked on small wonkish magazines or some wanktank or other before making the leap to the big leagues. Because blogging was hot on 2002-2006 Klein made his mark there; but it was never about the blogging for him.
Compare and contrast the true vanguard of liberal/democratic party/left wing/whatever you want to call it bloggers, people like Atrios and Avedon Carol and Jesse Taylor before he took Klein on board. Those were all people for whom blogging was the most important thing to get their stories out, not just a step towards a Beltway career and for the most part they're still where they started...
Even though they're objectively better bloggers.
"Buffalo Bill says: It expropriates the expropriators or else it gets the hose again."
Or how about "Trickle-down economics doesn't work"
The point of "We are the 99%" is that 1% of Americans hold, what is it, 25% of the wealth in this country, such that the remaining 99% are left to struggle over the rest. The point isn't quite that people can't find jobs, but that the rewards given the 1% aren't trickling down to a suitable degree. Just in case I need to make it explicit.
I know John Quiggin has a post over at CT about this.
71 got sloppy. I should have said: The remaining 75% of wealth still goes disproportionately to the upper quintile, leaving the bottom 80% with scraps. Trickle-down economics doesn't work.
The sign idea I got last week as "Soak the rich - they're overheating".
Back to topic of OP and wrt Yglesias in particular, the Think Progress website is a total turn-off. In order to post a comment you have to register with 1 of 4 big corporations (Facebook, Yahoo, AOL and I forget the 4th) - if that's progress then I shudder to think about what reactionary might be. I've emailed them about this and they seem very happy with the outcome, saying that Yglesias's website now has "higher quality" comments. I think they are delusional - on those rare occasions when I can be arsed to check -- and I used to be a daily reader of his -- there are typically about 8 comments, 6 of which come from "top commenters." Utterly sterile and boring, about as close to a worth-reading comments section as the Olive Garden is to actual Italian Food. There's more life in the comments at NRO Corner, and you're in really really really bad shape when Jonah Goldberg and Andy McCarthy's commenters beat your's for readability.
but that the rewards given the 1% aren't trickling down to a suitable degree
Good grief. "A suitable degree?" "More porridge please?"
Here's some added value for ya. Emerson above thinks it will slowly devolve, with moments of viciousness.
What I see is an acceleration in "resistance is futile, who cares what you think" actions by the PtB. Florida in 2000, Iraq, bankruptcy bill, FISA, bank bailout, Assange, assassinations, now the crackdown on medical marijuana. Part of Sanford Wolin's thesis about managed democracy is that a key difference from previous oligarchies is the how open and blatant they are, that indifference to public opinion is a public tool to enervate and demoralize any possible opposition.
I expect more of these, and bigger, more monents where the left-center, even me, in amazement say "They couldn't possibly do X, the street will rise up." Of course the street won't rise, or will be ignored or controlled if they do. And then we will believe that they can do anything they want, and then they will.
It will astonish you, I expect twice in the next six months. I am not sure I want to make it to 2013.
(Reading my 2nd novel in last ten years. The other was No Country for Old Men, this one is Spring Snow by Mishima. I remember now why I quit. OTOH, Chris Harman is very good.)
75:
Worse than that: I've tried, usually unsuccessfully, to comment on Thinkprogress using a old Yahoo account I use for junk catching. I suspect they want Facebook only.
If you think you are watching the street arise, well, Spain and Greece are making us look silly, and the Greek and Spanish gov'ts are still obeying the banks.
It's gonna take going too far going way past your comfort level to get real change. Even Egypt doesn't interest me much yet.
Yglesias' comment section has always been pretty awful. It may be less active now, but it's probably about equally as useless.
"Lawyers can be people in the 99%, too."
I like this sign!
LB: If you get locked up for taking a swing yelling at some cops, I will contribute some bail money!
Here is some Harman, relevant to OWS. He isn't exactly hard to find.
However, its strategic conclusion, like that of Hardt and Negri, is a rejection of strategy. In Holloway's account, the shrieks of anger with which different groups react to the horrors of the system will somehow come together to dissolve the ties of subordination that bind everyone to the system--including the armed thugs of the state. There is no need ever to take power because the state will simply collapse as autonomy takes over.In reality, Holloway's argument amounts to little more than a reformulation of the old reformist argument that if enough people want to change society, the ruling class will be forced to hand over power without a shot being fired.
Newberry went down to OWS and did a demographic survey. IIRC, 3% care about Marx, and 10% know anything about anarchism.
Part of Sanford Wolin's thesis about managed democracy is that a key difference from previous oligarchies is the how open and blatant they are, that indifference to public opinion is a public tool to enervate and demoralize any possible opposition.
I'm not familiar with Wolin, but this particular claim strikes me as correct. It's one I've seen made a few times: in the UK in 2003, for example, by a few bloggers and journalists; and in the US at various points during the Bush regime. It still holds true.
"Lawyers can be people in the 99%, too."
As long it's meant to indicate something like "and we're watching you corporate overlords", okay. Otherwise I think it's counterproductive, alienating to the non-lawyer portions of the 99%, as though the lawyer is saying "uh, yeah, me too!". I can see an argument to the contrary, though.
85 not to say that the idea isn't much older, but I started seeing it crop up more often around 2002/2003 as the Iraq invasion loomed.
Blogging can be tiring work, even if it doesn't look like it. Especially what MY does, with like 10 posts a day, including weekends. Truly a triumph of the staminest.
I just realized what's wrong with the FB commenters. For some reason, the FB commenters feel the need to offer their TOE in one blog comment. This is My Considered Opinion on the topic at hand, which isn't really a comment.
86: Right, I keep on forgetting that decent people would be offended to be associated with my ilk. I'll pretend I'm in marketing.
Prejudice against lawyers truly is the last safe prejudice in America. Look at how oppressed we are.
Traditionally, you're supposed to say you play piano in a bawdy house.
91: I think you mean "depressed." Not quite the same thing.
91.last: Come and hear the tiny violins inherent in the system.
90: I think it's important to point out that even the upper middle class is in the 99% and, to some extent, getting shafted in comparison to the richest rich. I don't know how to translate that into a pithy, non-obnoxious poster, sorry. You could work off the "We are the 1%" or "Billionaires for Bush" models...
91: it's worse than that. LB is a lawyer and a cyclist.
"We are the 99%, but not the 90% so we're going to support this a bit nervously."
91: What the world needs at this time is more lawyers.
97: My friend and I stopped in at a Starbucks mid-march yesterday. Felt wrong, but we needed a pick-me-up.
61: LB: http://delong.typepad.com/.a/6a00e551f080038834014e8c4c4abe970d-pi
102: That's awesome. I think the image conveys the snuggly lovableness of the typical litigator with almost frightening accuracy.
90: LB, I hesitated for quite a while before posting 86. My thinking is more that what you do for a living is irrelevant to the message, which is about broad income/wealth disparities and inequity. Sorry.
97 made me laugh.
Some of my best friends are lawyers.
So awkward everytime people at the reunion last night asked what I do. I felt so ashamed.
Ezra Klein just tweeted a link to Brad Delong's poster version of Moby Hick's 97. That may not be irony, but it sure is something.
Yes. I was overwhelmed with the prospect of including a link for each person in 108, and I didn't feel right just including a link for one.
105.1: No offense whatsoever. I just saw an opportunity to be miffed, and took it.
97/110: Love the slogan and the poster. (Nervous? I'm not nervous. Why do you ask?)
97/110: Love the slogan and the poster.
And DeLong's photoshop is pretty nice as well.
Moby Hick is Ezra Klein? I knew it all along!
Come and hear the tiny violins inherent in the system.
WTF is that tiny thing? I have never seen one of those!
I liked it so much, I tweeted it bought the company.
Oh, wait. That's the 1%.
Man, the power of the internets is a wonder. From Moby Hick's pants fingertips to unfogged to DeLong to photoshop to Klein to the twittersphere, in, like, well, I can't tell how long, what with the variety of timestamps.
118: tragically, many African girls have their tiny violins amputated.
123: Positive news on that front.
I've been meaning to make a poster saying "Actually, I don't want to be a serf."
Went to Zuccotti Park this afternoon. My favorite sign was a rebuttal of Yglesias's insistence that protesters need to have concrete demands.
The sign: "We're here. We're unclear. Get used to it."
126.1: Can I just say. Yglesias did not invent the notion that the protesters need to have concrete demands. It annoys me that he should be credited with the idea, as though he thought it up all by himself. Please don't do that.
I'm pretty sure he did think it up all by himself. Are you calling him a plagiarist?
Right, he didn't invent it, he discovered it.
But until the protests have concrete demands, I don't have to judge them as either a success or failure. This is important to me
A Financial Transactions Tax!
You got it!
Let's all go home.
Nor will I judge it by its achievements, failures, or bad consequences. Revolution is not an exam or sporting event. It is not for utilitarians.
But that is not why I am here. Movies!!
Even the Rain is not recommended. In these times, it is commanded.
131.5.last: The revolution will not be optimized.
85: This is basically the Berlusconi style, isn't it?
Meanwhile, I'm fairly confident that going out last Sunday to block Westminster Bridge and take part in the Occupy London GM was a lot more fun and better for me than listening to Bob whining that OWS's ideological purity is lacking. I think I will take this lesson and run with it.
re: 133
Yeah, iirc, Žižek made something like this point in his LRB article on Berlusconi and Ahmedinejad.
http://www.lrb.co.uk/v31/n14/slavoj-zizek/berlusconi-in-tehran
listening to Bob whining that OWS's ideological purity is lacking.
131:I never whined
You just lie and lie. Paste and interpret, but stop...fuck it I am going to start
Alex said that Occupy GM was burning cars and looting stores.
Fuck, even in a rage I cut, pasted, italicized, and left a reference comment number. And, of course, I don't hide behind a pseudonym.
Good work, Bob. You should never let your emotions get in the way of proper citation form.
137: Bob's citations conform to Chicago '68 style.
Because on the internet, the whole world* is watching.
*Potentially.
85,87: yeah, the runup to the war on Iraq was when it really became obvious to anybody paying attention that democracy was a sham, as the voters could safely be ignored inbetween elections. Worse, since all the serious people agreed with each other anyway and all the serious media saw it as their job to filter out all those dangerous radical ideas about not starting unnecessary wars, even voting didn't change anything.
As long as the great unwashed don't burn shite down and any even moderately effective resistance can be qualified as criminal, the system works.
Will Obama Occupy Wall Street? ...Ezra Klein
But all that was child's play. Kid's stuff. A march that just goes to the end of the block and back. Because it looks increasingly like Occupy Wall Street is roping in the biggest prize of all: President Obama.My colleague Peter Wallsten reports that "President Obama and his team have decided to turn public anger at Wall Street into a central tenet of their reelection strategy."
I'm thrilled.
Although I suppose the worst part of that article for Halford, Carp, and Lemieux is that Goldman Sachs switching their donations to Romney at a 7:1 rate does not mean the vampire squid had its fee fees hurt or that they are risking everything in a mad defiant gamble on a long shot. Goldman-Sachs does not gamble.
Obama is so over.
I think Digby coined the term "fee fees" to mock bankers who reported that their feelings were substantially hurt by being called names.
I didn't know Suze Orman was awesome. Has she been awesome all along?
"fee fees" is pretty common babytalk.
I assure you, Eggplant, I am not acquainted with any common babies.
Has she been awesome all along?
Nope. For someone who gives financial advice on TV, she's always been relatively benign, but I'm not aware of anything in her record that would account for this outburst.
Mumble mumble Overton something mumble.
Having scanned this thread I still don't know what you're talking about regarding Orman.
I had meant to link to her letter supporting OWS.
I think Digby coined the term "fee fees" to mock bankers who reported that their feelings were substantially hurt by being called names.
I believe it was the combination of Balloon Juice and Eschaton that suddenly started using it about fifteen times a day in a way that was both baffling and irritating.
So now, after having destroyed his credibility on financial policy, and long after it might have done any actual good, like spring 2008, Obama will run the fire-breathing populist campaign we have all been waiting for...and lose big to Romney, thereby discrediting and demoralizing every possible wing of the Democratic for a generation. Meanwhile co-opting and poisoning the only credible opposition (OWS) to Romney/Republican House/Republican Senate economic devastation in 2013.
The most brilliant politician I have ever seen. And the rare one that is consciously, radically evil.
154:Spring 2009 of course. and "wing of the Democratic Party"
I started liking Suze Orman a few years ago when Felix Salmon wrote this piece about her. Until then I was neutral to negative on her.
Does Obama actually need money from GS? If not, I'm happy if he stops getting any. And if Romney becomes ever more identifiable as WS' darling.
Huh. I'd always assumed, on the basis of nothing more than her self-presentation and using the name "Suze" and talking about "wealth" that Suze Orman was horrible. Guess not!
Before the internet provided higher quality distraction, I watched some of her lectures during PBS pledge weeks. Sensible stuff, mostly, although a little too dismissive, I thought, of less conventional paths.
157:Wait, Carp, you are going to buy "Obama, Scourge of the Bankers?"
With his sidekicks Immelt and Daley?
I have to say 154 is a real possibility. OTOH I think it's unlikely Obama will successfully position himself as a fire-breathing populist.
Also, that piece linked in 3 is by far the single best short summary I've seen of the administration's financial sins. Everyone should read it.
160 -- I didn't say that. That doesn't mean I'm sorry if The Bankers and Mitt Romney go around saying it. (And the indications that they believe this are a whole lot more substantive than the indications that Obama is going to throw the race as a way to destroy everyone and everything to his left).
The baby talk stuff just makes liberal bloggers sound stupid, like their attempted catchphrases and Internet Tough Guy cursing.
163 -- that's true, but Atrios, the master of the dumb liberal catchphrase, has been the most consistently right person in the history of the internets.
The baby talk stuff just makes liberal bloggers sound stupid, like their attempted catchphrases
God yes. If I never read "Rethuglican" again, it will be about a thousand times too many.
Some of them I don't mind as much as others, but 'fee-fees' is like chalk on a blackboard. But see 164.
164, 166: Cut the middle man and just go directly to Paul Krugman or Glenn Greenwald, if that's your pleasure.
Huh. I'm okay with "fee fees," because it describes something real for which there wasn't a succinct phrase previously. Krugman, via a comemnter, offers kvetchigarchy or ma he's looking at me funny/, but those are unwieldy.
Meanwhile, "Rethuglican" is just an epithet, and not a particulary good one when you've already got perfectly serviceable words like "asshole" or "Republican."
whole lot more substantive than the indications that Obama is going to throw the race as a way to destroy everyone and everything to his left
Crackdown Politics ...digby
Last week, property owners who rent to dispensaries were informed that the federal government could seize their properties within 45 days; this week, one of the four United States attorneys who declared open season on anything connected to state-legal cannabis told California Watch that the fourth estate is next. Specifically, the administration says any publication -- from print to web to broadcasting -- that accepts advertisements from medical marijuana businesses could face prosecution.
commenter:"Nobody knows that Obama has made immigration enforcement a big priority." (yeah, people know)
Giving California to Romney would seal the deal.
This guy is so fucking awful I am starting to warm to him.
When I first saw "fee fees" I thought it was a concrete proposal, like, banks should have to pay a fee whenever they charge customers a fee. I liked the idea.
bob, don't you have hitchhikers to chainsaw?
And wait, it gets even better. A "War on Wall Street" could wreck the NYC/NYS economy.
Losing NY and California and Romney could walk in with a 400+ electoral victory and coattails for a supermajority in the Senate
Kevin Drum says the National Press is turning on Obama. Like I said above they only do this if they are pretty certain he's gonna lose. In October.
I tried to tell you this guy was the Fifth fucking Horseman.
Losing NY and California
Care to place a bet on either one happening?
173:$50, if I am around.
I have been around along time, and I have no good reason to think I won't.
I also fucking remember 1980. Wish I didn't.
I actually think Obama kinda deserves to lose California, since he generally has been an oblivious dickhead towards the state, but of course I'll vote for him anyway.
And it sounds like Apo just made an easy $50.
175:One bet per blog in these hard times.
I was going to say. I'm feeling just fine about my bet with Von Wafer. He got off easy, considering he'll only have to buy me a soft drink.
And remembering 1980 makes me not want to talk about this anymore. Lost a wonderful Congressman that year.
I actually think Obama kinda deserves to lose California
Obama deserves to lose in general, but he is blessed with an utterly unlikable opposition that is about as poorly positioned to capitalize on his unpopularity as is possible.
Well, right, I don't think he will lose California, or that it will even be close here. He has kind of relentlessly fucked over the state in particular from day 1, however.
I remember 1980 also. I think Romney can win, and can win in a blowout. Depending on what goes on over the next year. The DLC political/economic/security playbook from the 1990s is badly out of date, and the people (including the president) calling the plays just seem baffled that it's not working. It looks like they've been counting on Republican ineptitude, and while that should never be counted out, early concession by the whackos to Romney's ascension cuts some of that out.
Embracing the reality behind OWS is outside the playbook, and while it's not exactly the most credible move to people paying attention, hell, Cantor is trying to do it too.
180: That's kind of a vote winning strategy in the other 49 states.
Screwing over Delaware might be emotionally satisfying, but they don't have enough money to make it financially rewarding for the other states.
This is an indication that I haven't been paying proper attention, but how has Obama been screwing CA specifically?
Not to be too serious, but, seriously, bailing out state and local governments in general, and California's in particular, together with housing and relief for the parts of California worst-stricken by the crisis, would have been one of the best things the administration could have done, both in terms of economic management and in terms of basic humanity.
It's fun to joke about intra-state resentment, but worries about reactions like 184 have been a gigantic reason why the administration has largely failed.
185 -- the administration could have helped to arrange and secure loans at the worst of the fiscal crisis here, but didn't. Also various regulatory waiver things. Also there was all sorts of infrastructure ready to go here for funding but that was denied funding for a failure to be "shovel ready."
inter-state, I suppose, in 186.
So he's screwed CA specifically by failing to do in CA the same sort of helpful things he failed to do everywhere else?
Neglect is your main accusation, then? I was wondering the same thing, how I had missed something affirmative that Obama had done to screw CA.
California has had bigger problems than most states, but I don't see how it was especially ignored. Illinois is just as broke from what I've read. Nevada housing is worse. The infrastructure in California, at least the parts of it I've seen, is in far better shape that what I'm used to. California had troubles borrowing money not because of its economic condition but because of its politics. I don't know what a federal guarantee would have done to help that.
I have nothing specific against Delaware beyond being irked at various banks incorporated there.
Yeah, as with the banks, the self-inflicted nature of California's gaping wounds really makes that kind of thing hard to swallow, no matter how necessary it might be.
Eh, I'm too busy to provide links in detail, but in the 2009 and 2010 cycles, there were explicit requests that the administration provide back up financing that would have provided cheap funding to keep the state government rolling, which would have had a huge economic impact.
The Obama administration specifically refused to do so.
Same thing with infrastructure spending; because other states had things like road repair that met timetables, but California has a stricter regulatory climate, more things were rejected here for a failure to meet the retarded "shovel ready" timetable.. Where things may have been similar in other states -- there's a continuum of neglect here -- the decisions on California were made both earlier (because the crisis hit here somewhat earlier than elsewhere) but the proportionate share of stimulus money was way less than it should have been, and the impact here greater.
193 -- yeah, maybe. But the failure to swallow it was a disaster, both for here and for the national economy.
The federal government should only give California a bailout if it wipes out the shareholders.
Oh, and cleans out the management.
there were explicit requests that the administration provide back up financing that would have provided cheap funding to keep the state government rolling
I'd kind of assumed those requests were just officials covering their asses to say they tried so they could get people to work on solutions. I never thought they were serious proposals.
Hey wait! We just got decent management in here. Don't clean it out now.
Illinois is just as broke from what I've read.
And so IL raised its damn taxes. Because it is functional.
200: I should have said "was just as broke."
If I never read "Rethuglican" again, it will be about a thousand times too many.
I can't remember because it's been so long since I read her, but I feel like I emphatically stopped reading Maureen Dowd because she phrased everything in infantile terms. Am I remembering this right?
And so IL raised its damn taxes. Because it is functional.
Better, but not actually stimulative or helpful in a recession. It's really this kind of thinking that has lead even thoughtful Democrats to disaster after 2008.
I never thought they were serious proposals.
Of course they were. And were quite cheap for the federal government. And would have avoided a huge chunk of pain in the downturn.
202: Yeah, it's all sort of pettish.
I mean, you could base economic management on "punishing" groups for politics yuo don't like or vaguely felt regional resentments, but that's a pretty stupid way to run an economy.
And were quite cheap for the federal government.
That's what they said about Fannie and Freddie.
205: While I can agree that punishment is stupid, California is past 'politics I find distasteful' and into 'politics that are doing themselves a lot of damage.'
The federal government should only give California a bailout if it wipes out the shareholders.
Gets it exactly right, assuming by shareholders you mean Howard Jarvis.
205 -- maybe, but what the Obama administration did hurt way more than it helped anything.
205 strikes me as almost exactly how Congress and the president, at the behest of an electorate captivated by the politics of resentment, have been running the show for decades now. But yeah, it's pretty stupid.
Also, my plane bucked the odds and didn't crash. Thanks again for offering me a ride, Megan. I was genuinely touched by the gesture, so I tipped the cabbie more than the usual 20% and billed it directly to your office's budget line.
205: The baseline state of federal help to California implied by calling current policy "punishment" seems absurd.
OT: If one were to view our economy as two interacting economies, the 99% economy and the 1% economy, could I think of increasing asset inequality as a source of deflation in the 99% economy? And, likewise, a source of inflation in the 1% economy? Or is this just gibberish?
I mean, the broader point is that every state government in trouble should have received, at a minimum, loan guarantees. The problem was just especially stark in CA.
211 -- you, specifically, seem to want to punish California, for some not very clear reason, other than just some weird resentment.
203: Raising taxes might be a bad idea during a recession, but state governments are really stuck with two bad options: raise taxes, or cut spending, both of which are pro-cyclical. If I were King of America, I'd have made the ARRA funding to states semi-permanent (or at least automatic, based on unemployment or some other economic indicator).
214: Many (most?) states don't borrow money.
216 -- sure, me too. Something like that (on a one-time basis) was close to what CA was asking for in the 2009 and 2010 budgets.
215: I'm have a reputation as an internet crank to uphold. I'm not a member of the administration.
Except that providing loan guarantees would have been way cheaper than expanding or extending ARRA funding.
212:In one sense gibberish, because economists
do not use "inflation" and "deflation" that way
They do do charts of national income, and income shares thereof...this is just GINI, I think.
A causal mechanisms from distribution is very controversial, and "a rising tide lifts all boats" and "Pareto optimum" are almost religious tenets in mainstream economics. Krugman just said last week, I should get this exactly, something about being ok with the top 1% doing all the consumption, as long as aggregate demand was adequate to full employment.
212: I think you'd want to use relative factor endowments and not inflation or deflation to look at this.
Here's the exact Krugman, from "Mirror Image", Oct 12...Paywall givng me problems.
Here's an example: is economic inequality the source of our macroeconomic malaise? Many people think so -- and I've written a lot about the evils of soaring inequality. But I have not gone that route. I'm not ruling out a connection between inequality and the mess we're in, but for now I don't see a clear mechanism, and I often annoy liberal audiences by saying that it's probably possible to have a full-employment economy largely producing luxury goods for the richest 1 percent. More equality would be good, but not, as far as I can tell, because it would restore full employment.
220: Seems like there's a moral hazard in letting California drive itself into the ground, then bailing it out without simultaneously insisting the state undertake reform of its legislative process.
224 -- I'm too tired for this. Please tell me how your theory would work in practice, why it wouldn't be applicable to any other state or indeed any other bailout recipient, and why what you are saying is distinguishable from the motherfucking tea party. Thanks.
OK, that was too grouchy, I can see why the moral hazard argument has a surface appeal, but think about it seriously in the context of (a) a major recession and (b) institutions that are enormously difficult to change and (c) building political patronage.
And with that I'm out! Middle finger to all the haters!
Maybe we can all just agree that the problem is federalism? That 50 variously rinky-dink little governments responsible for arbirarily sized territories and populations and economies and saddled with balanced budget requirements is actually a really terrible idea?
The US should have offered to step in and give CA loan guarantees (and perhaps even absorbed some of their loans) in exchange for being allowed to rewrite the state constitution. But until CA gets a new constitution, there's no point in the federal government bailing them out.
(Though of course, they bailed out the banks without doing similar restructuring, which was the wrong thing to do.)
228 would have been great, but is probably unconstitutional. Regardless, in reality, the Obama administration did absolutely nothing.
Now I'm out for real!
277: Yes! That is, in fact, the problem.
until CA gets a new constitution, there's no point in the federal government bailing them out.
Well, there's a point. But the operative question is how it doesn't become an annual affair, given the state of California's budgetary laws.
I believe that at the time, I was making jokes about hoping the feds would take us into receivership at the time they made the loans. (If I'm thinking of the right crisis.)
The state is making progress reforming its legislative process. Not in any way that directly addresses the issues, but the new re-districting maps make it look like Dems will have the votes they need to pass any kind of budget (2/3rds), instead of pleading for one Republican to please break ranks.
you could base economic management on "punishing" groups for politics yuo don't like or vaguely felt regional resentments
Since I would be perfectly willing to impose my will on the American South this way, I don't want to argue against the principle of economic management by "punishment".
federal help to California
California is still a donor state.
227 is correct!
(I was going to make a Regents exam joke about 230. [Infer deprecated typological representation of a non-depressed humanoid.])
California is still a donor state.
California is still a wealthy state.
Honestly, our Constitution is awful. But it looks like we're in view of going around it by brute force. Even with our fucked-up 2/3rd majority requirement for a budget that raises taxes, it looks like we'll get a Legislature that can still do that under this year's re--districting. Then we'll have a Dem legislature and a Dem governor that can unilaterally pass budgets and hopefully amend the Constitution. Stupid way to govern, but the most hope we've see in ages.
there's no point in the federal government bailing them out
IIRC, we're talking about the Feds backing CA loans, not actually transferring any money. It wouldn't have occurred this year, because Gov. Brown forced an austerity budget on the Dems. The question of "how do we know it won't happen every year?" is already moot. It happened because Schwarzenegger liked grand gestures.
I'm not interested in punishing CA for its disfunction, and I wish you'd gotten more help (just like everyone else), but it still seems very odd to suggest that the Obama administration somehow "relentlessly fucked over the state in particular" not giving CA the same sort of help and support that almost every other state also needed and didn't receive.
Yeah, Halford didn't convince me of that in particular.
And I think that was where any pushback in this thread came from -- not that CA deserved what it got, but that it didn't get treated worse than other states did.
I thought originally he was referring to Obama's wars against marijuana clinics, unpasteurized milk, and undocumented immigrants.
213: Gibberish because one can't decompose one country into two countries with a common currency that trade, or gibberish because I don't understand inflation and trade imbalances?
223 is an interesting quote, but while I usually trust Krugman I recall him not being very concerned with the distributional impact in the US of free trade (or is my memory faulty?), so I'd want to hear something more convincing than "I don't see a clear mechanism". I also don't think the hypothetical existence (under some unspecified conditions) of a fully-employed country working exclusively for the rich means much.
241.1: The 99% and the 1% are using the same currency so, technically, cannot be having different inflation rates. Non-technically, I don't know what that would mean aside from saying that the 99% are getting a lower return for their labor than they used to and that the 1% are getting a higher return for their capital. That is a common type of analysis in economics, but it isn't considered inflation as far as I know. That is, the issue of the 99% and the 1% would seem to be better handled by the usual analysis about returns to different factors of production. These are often reduced to just labor vs. capital (or more traditionally, land).
212: Krugman just said last week, I should get this exactly, something about being ok with the top 1% doing all the consumption, as long as aggregate demand was adequate to full employment.
followed by 223 quoting Krugman as saying:
Here's an example: is economic inequality the source of our macroeconomic malaise? Many people think so -- and I've written a lot about the evils of soaring inequality. But I have not gone that route. I'm not ruling out a connection between inequality and the mess we're in, but for now I don't see a clear mechanism, and I often annoy liberal audiences by saying that it's probably possible to have a full-employment economy largely producing luxury goods for the richest 1 percent. More equality would be good, but not, as far as I can tell, because it would restore full employment.
I'd like to clarify whether you take that quote to be Krugman saying what you attributed to him in 212, or if 223 supersedes 212 and you're just saying "Krugman said [blah]." 'Cause I read that post quoted in 223, and I read it as saying "wealth and income inequality are not the cause of the Lesser Depression," not as saying "I'm cool with wealth and income inequality."
There is an excellent method for handling moral hazard -- this method is known as "the contract". The Federal government could have given California loan guarantees with various onerous conditions if California defaulted. (The only question is if state sovereignty would make those clauses unenforceable.)
While California's political institutions are fucked up, the logic on display here is the exact same logic that is going to destroy the Eurozone and bring about the Great Depression 2.0. Greece wishes it had California's problems. California can't raise taxes, but Greece can't even collect the taxes it's already owed. On top of that, Greece has borrowed on a scale that California can only dream of, and falsified its economic data to hide its true state. If any government deserves to be punished, it's the government of Greece. But the desire to punish Greece has seriously endangered Europe's economy, and the future viability of the euro.
The 99% and the 1% are using the same currency so, technically, cannot be having different inflation rates.
Huh?
Are you confusing inflation rates and exchange rates?
California is still a wealthy state.
Can you explain what this means? I mean specifically with regard to Megan saying, in response to the idea that CA is some kind of pathetic charity case, that actually the state gives more money to the nation than it takes in? Or were you just being glib?
I think he means that California is well endowed in natural resources, such as supermodels.
248: natural? Not really, no. But it is true that our vast storehouses of collagen and silicone are the envy of the world. But don't even think of invading, because we'll defend ourselves with botulism toxin.
Supermodels are really more of a NY thing, tbh. We have more aspiring actress-models, though, who are vastly more numerous. Advantage: California.
The way in which California was particularly screwed are twofold: (1) the scale of the housing and state budget problems here are greater than those in most other states (with a few exceptions, like Nevada) so the general bad administration policy had particularly bad effects here, not to mention that we haven't received industry and region-specific bailouts like the auto industry or Wall Street; (2) the administration really did just straight up screw over the state on a lot of the ARRA funds and other contracting projects.
Then we should be bailing out New York. California can go hang.
248: Don't forget the STD weapons easily available in the Valley.
243:Your problem is mostly with Krugman, and most other mainstream economists. Here is the original post.
it's probably possible to have a full-employment economy largely producing luxury goods for the richest 1 percent. More equality would be good, but not, as far as I can tell, because it would restore full employment.
Look economists have priorities:growth, inflation/deflation, productivity. Distribution and wealth equality have been very low on their list for decades.
Does Krugman care about equality? Sure. More equality would be nice, but not the expense of the other factors. This ain't the Soviet Union.
We leftist have long understood that our argument for distribution would always have to be made on efficiency grounds, It is a very tough haul.
Actually, I don't think supermodels really exist anywhere anymore; I believe they vanished from the scene in roughly 2000. Just not worth the cost.
It is unsourced, and I can't find (meaning have no inclination to dig for) official statistics, but this link says that CA was estimated to receive about $85 billion of the $787 billion in total ARRA funds. That's almost 11%. Considering that CA's GDP is about 13% of the overall US GDP, I guess you could argue that you got shortchanged, although I doubt you were more shortchanged on ARRA dollars that you are on federal dollars generally. As noted above, CA is a net donor to the federal coffers.
My evidence for this is mostly anecdotal and unrelatable. But you can resent Obama in your particular way in your home state too, if you want, Urple.
As in, I know personally of perfectly good projects that were rejected for no apparent reason other than "we don't care much about your state and have ludicrous rules." But I haven't done a systematic analysis.
And proving that a more equal distribution can be as or more efficient than the free market allocation is a particularly tough haul because the friends of capital wrote the tools and created the language.
I have been telling y'all that if/when we get out of the fucking "zero-bound" Krugman, DeLong, and Thoma will stop being out allies. They are much more neo-classical than Keynesian.
You need to check DeLong's archives in the early aughts and his struggles with inequality. They cared about the Bush tax cuts because of the deficits.
My evidence for this is mostly anecdotal and unrelatable.
Okay, but the lurkers support me in emails.
254: Noooo. I was walking down Spring St. a few months ago and it was fucking chock-a-block with really tall children toddling down the street clutching their "books."
(Seriously, the thing about runway models is they are 1. super young and 2. often kinda odd looking -- in interesting ways, of course -- in a way that aspiring actresses aren't.)
247: The people who live in California have high incomes relative to the average American.
Right, I mean there are still fashion models, just not "supermodels" like those that existed circa 1991.
Seriously, the thing about runway models is they are 1. super young and 2. often kinda odd looking -- in interesting ways, of course -- in a way that aspiring actresses aren't.
I'll again recommend the documentary America The Beautiful.
When I watched it, I liked it but thought it seemed a little bit light-weight and perhaps obvious. But in retrospect I think it's a solid documentary. There are a number of scenes and images that stick with me and seem worth reflecting upon.
261: and? Megan's point was, unless I'm much mistaken, that the moral hazard argument is suspect, as Californians put more into federal coffers than we take from them.
262: Agreed! I took note of the "super" part belatedly! Also -- "A l'occasion du 40e anniversaire de l'Histoire de Melody Nelson, sortira le 7 novembre le coffret Super Deluxe. En avant-première, des versions inédites chaque semaine sur l'onglet Melody Nelson."
264: Unless you'd like to argue that progressive income taxation is unfair, I don't see your point.
264 -- You put more in because you're wealthier than you would if you were poorer. You take less out because you're wealthier than you would if you were poorer.
Many of us think that people in the upper income brackets nationwide should pay higher taxes -- maybe even returning to the hell that was 1998 -- and while this would undoubtedly make the in/out statistic for California look worse, I don't think anyone opposes it on that basis.
266: if I had understood the playing field before, I might now accuse you of moving the goalposts. But honestly, I'm still not sure what you're arguing, though I'm beginning to suspect that we're talking past each other.
No, I don't think either of us are opposed to progressive taxation. I brought up the point that we're a donor state because people were all "What if we have to keep bailing out California all the time?" and I was all "Dude, we send you money every freaking year." I'll say right up front that we have a particularly fucked budgeting process, but there are already reasons to hope we won't see the freakishness that happened under Schwarzenegger again.
269: I don't see how I'm unclear. I am arguing that bailing out California would be a net transfer from the relatively poor to the relatively wealthy.
269: Here's a vote for 'talking past each other'. I'm interested, but have no idea of what either of you is arguing.
Oh, 270 and 271 clarify what's going on.
Using federal income tax revenues, which are largely derived from incomes of wealthy Americans, including particularly Californians, to prop up social services to the poor in California (which is where the bulk of the cuts were felt) would not in any remotely meaningful sense be a "net transfer from the relatively poor to the relatively wealthy."
268: huh, I really thought we were talking about moral hazard. That said, you know full well that CA isn't only a donor state because of progressive taxation. Holy crap, Charlie, I can't actually believe that you're being that disingenuous and ahistorical. But then again, it must be nice to have two senators when your state has a population that's about five times larger than my county's (by the way, Yolo isn't a very populous county by CA stanards).
If we're talking about the same episode, and I'll freely admit that I barely remember it and am not sure what anyone else is discussing, it was a question of Feds backing CA bonds during a time that our Treasury was low because of a budget stand off; those bonds would surely be paid because our Constitution requires that we pay them first. But because the Feds didn't get involved, our interest rates went up and it cost the state a ton of money that we wouldn't otherwise have had to spend. But it still wouldn't be the poor subsidizing the rich. It wouldn't have cost the Feds money to do that, if I understood it at the time and remember it right now.
271: Given that we have a collapse of aggregate demand, and that collapse has hurt the relatively poor much more than the relatively wealthy, your analysis doesn't make any sense. The point of "bailing out" California is to stimulate aggregate demand, which will help everybody.
Here ya go Mike Konczal out favorite economists, posts on inequality today!
A sixth point will hopefully be added in the future: A more equal distribution creates a better economy. There's an assumption that the market, instead of creating concentrations of wealth and power that slow growth, assigns resources to where they are best used in both the short and long term. However, it is hotly contested whether income inequality causes crashes; researchers at the IMF found models where it can. And a whole other strain of research finds that equality causes growth to be more sustained
But this is Konczal. And the empirical studies are so late in coming, and economists can accept the Reagan and Bush tax cuts, because there are a lot of conflicting empirical studies and the theory states that it doesn't matter. The money will move, and the hedge fund trader doesn't exactly bury it in his backyard. How could his income not create jobs?
A lot of economics, and a lot more ideology stands with indifference to inequality.
277 is right on as well, of course, we are talking about an almost risk-free proposition for the Federal Government that would have materially improved the lives of a lot of very poor people.
I don't see how the fact that California pays higher taxes and collects less in payments -- both because of per capita income -- has anything to do with moral hazard. California needed to be bailed out not only because of the general slump -- which is bad, and California should be bailed out on that account -- but also because of systematic under taxation of wealth over the last 30+ years. I don't imagine you actually disagree with me about the latter.
It is nice to have two senators. I'd be happy if our senior senator retired in 2014, and the seat passed to our current governor.
I would qualify the latter. Systemic under-taxation for the last 30 years and a bizarre system that let rules accumulate that can't be negotiated by the substantial (60+%) majority of Democrats in our Legislature.
Further, it had a lot to do with the personality of the last governor, who couldn't rally either Dems or Republicans to his side. Brown got a pain-inducing budget done on time this year.
281: sure, Charley, I agree with the latter. In fact, I think we agree about almost all this, which makes your 268 all the more curious. That said, whatever, it's all water under the bridge.
275: It's not moral hazard if the person/state/whatever was too poor to protect/insure against the bad outcome.
As far as I know, CA is only a donor state to the extent of demographic and economic differences plus the small amount resulting from not being West Virginia.
not being West Virginia
We're working on it, Moby. Just give a few more years.
OT: If one were to view our economy as two interacting economies, the 99% economy and the 1% economy, could I think of increasing asset inequality as a source of deflation in the 99% economy? And, likewise, a source of inflation in the 1% economy? Or is this just gibberish?
Not gibberish -- inflation depends on what you consume. Inflation for the general population is defined based on a typical market basket that could be very different based on where you live and what you consume. The market basket for the top 1 percent presumably includes more Hamptons real estate and gold-plated yachts.
The real problem is our foreign supermodel trade imbalance. The former Soviet bloc has been taking advantage of our lenient import restrictions to glut our market with tall, waifish, blond women.
290: Let's not throw out the willowy blondes with the bathwater just yet.
I thought the former soviet bloc provided the Bond-movie-villainess types, and the waif-like ones are largely British?
If anyone has been following the Goldman-Sachs endorsement of NGDP targeting today, discussed twice at Yggles and everywhere else, This by Nick Rowe will explain it to you and make you laugh.
A credible central bank is a bit like Chuck Norris. (Apologies to Lars Christensen for stealing his metaphor.) Chuck Norris simply looks at the target variable, and it moves to wherever he wants it to go.
Rowe is serious.
292: I think Agyness (or wtf) might be the closest thing we have to a new supermodel (but still, does everyone know that name in the way folks knew Cindy, Naomi, Linda, Elle, etc?). However, in bulk the waify blondes hail from points east.
Let's not throw out the willowy blondes of distinguished merit or ability
"Since the advent of the mini, English women had gotten away from those remarkable clogs that once identified them on sight. It used to be said that British women's shoes were made by excellent craftsmen who had had shoes carefully described to them, but who had never actually seen a pair firsthand. They were, however, comfortable, and they wore well. And those were also the principal virtues of the women who wore them."
As attested to by one prospective employer, mind you.
294.--Aygness seems to have spent the last year or so enjoying semi-retirement.
re: 294
Lara Stone seems to be the most common person I see on magazine covers here. Checking wiki apparently she's 'the number one'.
My wife used to occasionally baby-sit for a bona fide 'top model' -- not some wannabe, someone with a bunch of Chanel campaigns, Vogue covers, and the like -- and when I met her she was really normal looking. Pale, tall and skinny, but not amazingly so, good cheekbones, but not as freaky/odd as a lot of models seem to be.
294: Heh. I totally refuse to pay attention to anyone spelling Agnes with a "y" and two "s"s.
I totally refuse to pay attention to anyone spelling Agnes with a "y" and two "s"s.
Also, no good can come of association with anything labelled Gwladys or Ysobel or Ethyl or Mabelle or Kathryn.
301: She's a tender goddess, Bertie!
I am fond of certain ethyl compounds.
302.--And we see how that turned out, Comrade Little.
289: Seems reasonable that way. If they are purchasing different baskets of goods, then prices will drop for what the 99% want and increase for the 1%. I don't know if that is what is happening entirely. Health care, food, and education seem to be increasing in cost.
OT by now, but if Charley's still around: I heard a half-hour radio interview with the governor of your state, Brian Schweitzer -- on the Tavis Smiley/Cornel West show, of all things -- interesting guy. Kind of weird guy. I didn't really know what to make of him.
306 appendix: I don't feel deflated.
I'm sure that W/olf/son's mom is relieved to hear that, Moby.
306-308: me neither. Commodity and energy prices have been increasing (well, generally, they bounce around) and that hits everybody. I actually think the split between hypothetical rich-person and regular-person price indices was more salient at the height of the housing bubble, when someone in Kansas making $75K living in a $100K house in driving distance of a Wal-Mart could feel pretty rich, while someone in San Jose making $250K in a $750K house near the Whole Foods could feel all beleaguered and middle class.
could feel all beleaguered and middle class
Good lord, I've had to semi-lecture my coworker about this in the last week or so. OWS provides the opportunity.
Good lord, I've had to semi-lecture my coworker about this in the last week or so
sounds like a party.
312: Well, it gets a little tiresome to keep hearing from him, "Well, you know, a person can make in the healthy six figures these days and still not have a lot to spare." Eventually I have to say something. He agreed readily enough after initially pausing and staring, so it's all cool.
"Everybody knows you never go full lecture."
after initially pausing and staring
The hundred thousand dollar stare.
no good can come of association with anything labelled Gwladys or Ysobel or Ethyl
307 -- Parsi, did BS talk about the single payer thing he's trying to get the feds to approve?
277: It wouldn't have cost the Feds money to do that
Risk is cost. What would it have cost to buy default insurance on those bonds? That's the expected cost of a Federal guarantee.
Unless you think the federal gov't had (a) information about how safe California bonds that was unavailable to the bond market, or (b) a good reason to think their judgment was superior.
318: I ... believe so. The interview/exchange moved really quickly. Yes, he did. Things were fast moving enough that there weren't a lot of details; I recall he talked about Saskatchewan's health plan, and the egregious problems with Big Pharma here. No details about the ins and outs of actually getting the Feds to approve a waiver.
I was just tuning in at that point. The guy is very direct, quite surprisingly so, with a weird mix of traditionally liberal and conservative viewpoints. At some point he said that people in Afghanistan are living in the stone age [emphasis his] and we can destroy their "mud huts" as much as we like, they'll just build others. Apparently he lived for seven (? I think he said) years in Libya and Saudi Arabia and speaks Arabic.
Mm. And he's vetoed 78 bills the Montana Republican legislature has put forth, the prior record being 19 for a comparable period, because they were proposing to 'allow hunting with spears' and similar foolery, and the people of Montana agree with him!!!
Kind of an odd guy.
319: There's no risk. Safe as housing or owning bank stock.
because they were proposing to 'allow hunting with spears' and similar foolery
Before RH can say it, let me just note that hunting with spears seems like a great idea.
He didn't just veto those bills: http://www.youtube.com/watch?v=Qur80XKiW9E
http://www.cbsnews.com/8301-503544_162-20054399-503544.html
Longer clip. BS is fun. I told you about him trying to teach me Arabic, I'm sure.
The spear hunting thing was great. Everyone spent the whole legislative session ridiculing the Republicans, sent to Helena with a big majority and a mandate to do something for the economy, and some dope proposes spear hunting!
325: I'm sure you did not!
Yeah, interesting guy. Weird, as I said. What was most interesting was that it was Tavis Smiley and Cornel West talking to this guy, and they kept going back and forth between "Mm-hm, mm-hm" (means speak it, brother!) and long pauses (means don't know what to think about that thing you just said). Three strong personalities in the same virtual/radio room.
Does BS have national aspirations, Charley? That's not necessarily important, but I wonder.
And the buffalo bill, about 6 mins into the longer clip. I'd forgotten that one.
He didn't even get to veto the bill that required all federal officials to check in with the county sheriff before enforcing any federal laws anywhere in the state.
He's not just branding these bills: he using different sized branding irons depending on how stupid the bill is.
That seems kind of like a subjective call. Spear hunting seems much safer for man and beast than using rifles or bows.
I am torn because I like spear hunting but also like vetoing Republican bills with a big ass metal branding iron.
You could just get the Republicans to pass another bill.
I was suggesting an obsidian knife grizzly season. Have to make the knife yourself within 10 days of the hunt.
The branding according to stupidity level is truly awesome.
332 -- They were one or two votes short of override in the senate. And the way our session works, stuff has to be transmitted from one house to the other by the mid point -- there are some arcane exceptions -- but generally, once stuff gets vetoed, it's over. For two years, til after the next election, when they can try again.
So I've got two years to perfect my knapping.
I want to spear hunt the ultimate game -- Republicans.
333: Obsidian knives are for use against the White Walkers, silly.
322: In fairness, California bonds are not quite that "safe."
It's not that risk doesn't cost money. But the overall cost to the federal government involved in guaranteeing California bonds against a general default, in 2009, was very low, and the human and economic consequences severe. The same was true of the most recent round of cuts.
340: The cost was low, because the risk was low, because California is by any reasonable standard that ignores its impossible politics, really rich.
Does thinking about hurting poor Californians make you feel better about living in a cold shithole, or do you have some other interest?
I mean, 342 is true, but also points to why a loan guarantee would have been both a cheap and very effective form of stimulus at a time when a lot of people really needed it. Except that would have made some dude stuck in Pittsburgh unhappy.
Except that would have made some dude stuck in Pittsburgh unhappy.
We're swing state voters. You're just rich people in small houses without enough guns.
OMFG. This is ridiculous, you guys. None of you has as governor has awesome as Montana's, so get over yourselves.
has a governor as awesome as.
You know what I mean.
My ass governor is as awesome as Montana.
I thought your ass was ruled by a collective.
What kind of man do you take me for?
But this time it's going to end in a spear hunt. Or possibly use of a gigantic branding iron, possibly on somebody's ass.
(just tbc I'm not feuding with Moby, just calling him out on the politics of resentment, since I want my resentments to control)
I'm too much not racist to feud with people from other cultures.
Take the governor off that ass and there's no telling how fast it'll move.
Might not pass smog, though.
340: Just giving CA the money would have been far better than the secret transfer implicit in a guarantee.
If it would have cost so little, why not just pay for a bond wrap?
On another note, if I could stomach the boredom and were starting a dissertation now, there's a really great historical research project to be done on state and federal budgets in the early 20th century and how the politics of budgets tied into the populist and progressive movements, the conservative responses to those movements, public works and social services in general, the reform of legislative and executive processes, and transparency. A lot of current political dysfunction has to do with rules set in the 1900s-1930s period.
What the fuck is "bond wrap" mister wall street big shot? He's the 1%. Get him.
I just think California is too big.
I'm too much not racist to feud with people from other cultures.
Macaca yogurt. Available at ethnic grocery stores everywhere.
Hey crap I used an internet-y acronym. Sorry everybody. I blame some relative of alameida's or other.
360: Only measuring north to south. East to west, it's fine.
Having lived through a 5.8 magnitude earthquake with an epicenter 250 miles away, and having stared intently at Katy Perry's chest, I know all about the problems of today's modern Californian.
Is Katy Perry's chest your safe place in an earthquake?
Given that the earthquake felt exactly like being drunk, but it only last for ten seconds, I don't see why anybody worries about earthquakes at all.
an internet-y acronym
Not as bad as saying "fee fees" though. I do think, in addition to the consistent rightness of much of Atrios' blogging, that some of his and others' use of repeated catchphrases has probably been effective: "big shitpile" "friedman units" and a few others like that.
Effective at what, I'm not entirely sure, but it does seem like a useful shorthand since it means you can keep on covering a some things without having to write at length about each one every single time it comes up.
357.2: We could have just called one of the AAA monolines. Oh, wait.
felt exactly like being drunk, but it only last for ten seconds
In soviet Mongolia, earthquake drinks you.
I don't get what "fee fees" is about, but I wasn't paying attention. If it is the debit card thing, I've just switched to using a credit card.
Fee fees are discussed in this very thread thread, Mo Hi.
Despite having left 13% of the comments.
370: Exactly. Many bond insurers saw their guarantees as cost-free too. AIG sure did.
Who the fuck said anything about cost free?
Maybe not cost free, but "underpricing risk" was kind of the main theme of the pre-bust years.
363: my step-father's sister doesn't get enough shout-outs sometimes, and she's a stone cold bitch. at the funeral when my sister was about to pour the ashes into the grave (as she had been designated and planned to do), step-aunt got up sobbing from her seat at the front, literally wrested away the urn from my sister, and poured them in herself, then cast herself on the ground in anguish. while wearing a veil. because they had a special (sexual!) relationship that was true love truer than anything else and we were all awful for stealing him from her. let's blame her. and then let's consider again that there is no amount of southern gothic that can be pouring it on too thick. tennessee in the house!
376: It turns out they were generally correct about municipals, but they managed to fuck their AAA ratings over chasing other business, which meant they no longer had a wrap of any value to provide. Unlike, say, the federal government. Nobody is claiming it would be cost free, but possibly a least-cost solution, and one that couldn't be privately provided.
I don't even understand this argument. The question was, in 2009, whether or not the feds could have had a cheap form of stimulus at very low risk by guaranteeing loans from private banks to California, thus lowering the rates the state would have to pay and serving as a form of stimulus. That wasn't exactly cost free, but, as everyone can and should acknowledge, the risk of California defaulting on those loans was very low, so the risk to the fed treas would be out of pocket was not much. An analogy to the bond insurers isn't very smart.
381 to 378 and 376, though I suspect that the Mobes is engaging in a mild form of trolling.
Not on this thread I'm not. The extent to which California could pay back the loans was entirely dependent on it getting its political head of out its political ass. And that only happened because it was about to be unable to borrow money.
Also, you're just bitter because of all of governors who appeared in Predator, you got the worst one.
The extent to which California could pay back the loans was entirely dependent on it getting its political head of out its political ass. And that only happened because it was about to be unable to borrow money.
That's actually not even remotely true; it was able to borrow even under worse political conditions than it has today; not only does the Cal Constitution require payment to bondholders first, but under any plausible economic recovery situation, the loans would have done a ton of good.
The rest of your theory is totally divorced from reality and also is basically just tea party-style punishment bullshit. Really, it would be applicable to any other bailout recipient you could name. The point is that you needed then, and need now, cheap stimulus that would benefit everyone, even your ass. There was an opportunity to do this in 2009 in a cheap and effective manner that was blown, apparently because of people like you. And a lot of poor people took it on the chin as a result; personally, I did just fine.
not only does the Cal Constitution require payment to bondholders first
That's just doubling down on risk. The service cuts were horrible, but not nearly as bad as if they'd had to happen after more borrowing with no revenue growth.
The rest of your theory is totally divorced from reality and also is basically just tea party-style punishment bullshit.
Your theory is give money to the relatively wealthy to stimulate the economy and I'm from teh Tea Party?
Who are these relatively wealthy you're talking about? It would be using the federal treasury, which had the ability at the time to borrow cheaply and provide guarantees for bonds, to provide loan guarantees that would have provided services for poor Californians, some of the poorest people in the country.
The feds could have done the same thing in other states, to good effect. It would have been one of the best ways to get money from the government into hands of poor people who would be likely to spend it -- and also would have had a stimulative effect on the country as a whole at a time when precisely that was necessary to generate demand and the feds could borrow for free. It's a no brainer.
I mean, it's a no brainer if you care about poor people more than about nurturing some kind of weird geography-based resentment, which apparently you don't.
The bridge I cross going to work has been dropping chunks of concrete on the freeway beneath it for so long (8 years or more) that the city came out and refurbished the net that catches cement chunks. Loan guarantees wouldn't help (or at least would not be cheap) because we probably can't pay it back.
And about 2/3rds of Pittsburgh mocks my area as wealthy elites who get all the government services.
So, your view is that my life sucks so therefore fuck you. Which is pretty much the median tea party viewpoint.
I mean, don't you think a better overall economy might have helped to fix your bridge? Or that using the federal government to, I dunno, help finance state and local governments during a downturn might have helped?
392: My point is that saying "bond guarantees are cheap" is pretty going to send federal help to where it is needed least.
My point is that if California needs federal aid, as opposed to wants it really bad to avoid hard choices, the whole general economy of the U.S. is not sustainable.
Also, it's almost 1 am here. Night y'unz.
Looking at some of the articles from 2009, it appears that a big reason California didn't get any bailout was because the administration was concerned that other states would come around asking for help if California got any, and you can't help everyone, right?
I get the impression that concerns over California's political dysfunction were more muted because it's mainly liberals who want the state to be able to raise revenue. Conservatives are fine with the structural mess. So you end up with dynamic that the people more likely to want a state bailout are more likely to want conditions attached; opponents of the bailout just oppose all of it, no detailed conditions required.
that a big reason California didn't get any bailout was because the administration was concerned that other states would come around asking for help if California got any, and you can't help everyone, right?
That was in fact the attitude, but it was both empirically wrong and didn't really think clearly about the nature of the guarantee.
to send federal help to where it is needed least
Have you looked at relative unemployment numbers between Pennsylvania and California?
if California needs federal aid, as opposed to wants it really bad to avoid hard choices, the whole general economy of the U.S. is not sustainable.
What does that even mean? We are talking about a cheap and effective means to stimulate an economy during a downturn. Or do you just not believe in Keynes and really are a tea partier?
Moby, your argument literally makes no sense. The Federal government could fix your bridge, and give California loan guarantees. Nobody sane thinks the government needs to choose. The government can now borrow for 30 years at 3%, and for 5 years at under 1%.
370, 380: Tell me about it, wrote the guy whose bread and butter came from those entities but has to admit that he didn't work on the commodity muni deals.
360: I just think California is too big.
364: 360: Only measuring north to south. East to west, it's fine.
Actually if you go by westernmost point to easternmost point of the state as measured by span of latitude* California is 5th after Alaska, Hawaii**, Texas and Montana. Not true for east-west distance across at any one longitude, although the largest extent (roughly Lompoc to Lake Havasu City) is still a pretty furr piece.
*East-west distance in miles is not well-defined for points that do not lie along the same latitude; unlike north-south miles for places of differing longitude--a degree of latitude is ~69 miles everywhere on the globe.
**The main islands do not spread that far, but the state extends almost to Midway.
I do wonder where folks taking sides in this debate would have come down on NYC "bailouts" in the mid-70s. Personally, I was for them.
It's funny -- I want to argue with Halford purely because of the attitude he came in with. I don't think California got specially screwed, I don't think the failure of the federal government to fund ARRA projects in California had anything to do with the politics of resentment or any special anti-California malice, and I think a state full of rich people that can't get itself together to tax itself adequately to provide public services is in a poor rhetorical position to whine about the (on average, poorer) citizens of the rest of the country not giving it a handout.
That said, of course CA should have gotten much more stimulus, just like the other forty-nine states: more ARRA money should have been spent everywhere, loan guarantees should have been handed out where ever necessary or helpful. I absolutely agree that the feds should have helped CA wildly more than they did; what gets my back up is the implication that CA got stiffed of its fair share of a fixed amount of stimulus. CA should have gotten a bigger piece of a bigger pie, but if we're talking about how the pie that actually got handed around was split up, times are hard all over.
399: That's a different argument. RH was, at most points, arguing that California bond guarantees were an especially deserving form a stimulus.
403: That is my initial reaction, but per 402 (and my support for other "targeted" bailouts--like the auto industry) I am not sure that I have a consistent position.
I think you're misreading LB. (Or, at least, I agree completely with LB, and if I'd written 403 (which I think I did, way back in 189/237), you'd be misreading me.) I wouldn't have objected if CA had gotten a special, targeted bailout, just like the auto industry did. I'm only objecting to the characterization of the absence of a special, targeted bailout as Obama having "relentlessly fucked over the state in particular".
406.last: OK yes. On that narrow point I agree.
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Generation X Doesn't Want to Hear It
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Urple's reading me correctly. I wouldn't have minded a targeted bailout pointed at California at all; what's setting off my desire to argue is purely the position that the absence of special help for California is equivalent to targeted anti-Cal hostility.
Well, there was a moment in time where the administration had a chance to provide some powerful, and important, stimulus that was California-specific but failed to take that chance. I have at least anecdotal evidence that the failure to be worried about this was at least in part due to the fact that there weren't a lot of Californians in the administration, and folks just didn't care that much (in a way that they did about, say, the auto industry or the financial services industry). If the administration had never taken over GM and Chrysler, or provided a backstop to the auto parts industry, because, at the end of the day, it just didn't think it was that important, would it be fair to accuse it of an anti-Michigan attitude? I say yes, that is what it means in a political context to not give a shit about a place, maybe you disagree. But the bottom line is that the administration didn't help when needed. I have no problem saying that's also true for a lot of other places, but they had a good, easy chance in CA and didn't take it.
But the bottom line is that the administration didn't help when needed. I have no problem saying that's also true for a lot of other places, but they had a good, easy chance in CA and didn't take it.
That, I'm not going to disagree with.
To continue in my OT Eggplant Doesn't Understand Economics series, I was musing about inequality. Since there doesn't seem to be much of a chance of reviving labor unions (my apologies, Witt et al), I was wondering if one couldn't create a sort of GINI tax for individual companies. Would this be workable, or would it introduce too many distortions, like overly penalizing industries that rely on large amounts of low payed labor?
I was wondering if one couldn't create a sort of GINI tax for individual companies.
The proposal I've seen here is take away the deduction for employee compensation over a certain amount -- say, you can pay your execs up to $500K a year, and it's a business expense, but anything over that has to come out of profits.
And I don't think that'd do any harm at all, if you could work the miracle required to get it through Congress.
Shorter 408: "The economy was just as bad 20 years ago as it is now, so fuck you."
Which, not actually true, but graduating in 1992 was a rough-looking job market. Which is a large part of why the Peace Corps looked like a good idea.
Would this be workable, or would it introduce too many distortions, like overly penalizing industries that rely on large amounts of low payed labor?
It would only overly penalize industries that rely on large amounts of low payed labor but pay their executives exorbintenatnly the e is thei s executive level tax or itsssss do you mean individual companies or measured acordd the economoy as a whole as aq whille?
414 is already the case for annual compensation over $1,000,000.
Urple? Have you eaten anything unusual in the last hour or so?
419: It is? I missed that completely. Has that been the case for a long time, or is it recentish?
(But only for publicly-traded corporations and subject to certain important exceptions.)
421: it's been that way since 1993, I think. IRC 162(m).
About.com is the first thing I found googling, which is pathetic, but it seems to say that there's a 'reasonableness' standard, rather than a numerical limit. I don't know how that plays out for large companies.
Can you link to something reputable so I can figure out what I'm talking about on this?
Can you link to something reputable so I can figure out what I'm talking about on this?
Is herpy net reputable?
I see I picked the wrong thread to post The Official PGD Economic Agenda. . It is at the link (to the trade deficit thread) if anyone wants to take a look.
To give a sense of how far away we are from anything like a GINI tax, Dodd-Frank included a requirement that companies simply *report* the ratio of the pay of their CEO to the median worker in their global workforce. Again, this is simply a reporting requirement. It is under heavy assault in Congress and likely soon in the courts and may not survive. (Companies are claiming it is overly costly to calculate their median worker pay, even on an approximate/sampling basis). If not for union support it would perhaps already have been eliminated.
A problem with saying "we will never recreate unions/labor power, so we should pass X law" is that without the unions it is almost impossible to pass the law, or sustain it once passed. There needs to be something - if not unions, then something else - that provides institutional support and representation for the economic interests of the middle class in the political system. IMO, things like MoveOn cannot do it because they don't have a committed/consistent funding and membership base separate from the Democratic party and business interests.
The "reasonableness" test is almost never actually enforced, I don't believe, but yes, that's technically supposed to be a separate limit as well.
Thanks -- so it excludes performance bonuses, if I'm reading it correctly. But if that were tightened up, I think it'd be great.
(Man, I am continually impressed by how little I know about pretty much anything. I know some things about NY civil procedure. And I crochet well. That's about it.)
425: Is (m) (4) (C) as huge of a loophole as it looks like?
subject to certain important exceptions
Yeah, you can pretty much drive a truck through the "performance-based compensation" exception.
I did that to make you feel better, Moby.
430: yes, that's a big loophole. But those payments do have to be objectively tied to achievement of some performance metrics set by a compensation committee composed solely of independant directors and then approved by a majority of the stockholders. It happens all the time, but that's actually a fairly high hurdle, compared to the normal sort of hurdles executives have to jump through in order to pick the pockets of their corporations.
A lot of people think that the limit on deductibility has been counterproductive because the "performance based compensation" exception led to the disastrous proliferation of stock options, which have encouraged gaming of accounting profits.
Right, I'm not actually trying to defend 162(m); I only brought it up because 414 made me think LB was maybe unaware of it.
Which I totally and completely was!
(Come to think, maybe I used to know about it, knew that the loophole made it a dead letter, and forgot it existed on that basis? I do that -- there's a part of my brain devoted to culling useless knowledge that also seems determined to treasure every minor incident in every novel I've ever liked forever.)
I must know everything important about the law. Why else would they call me for jury duty?
I actually don't crochet very well. I crochet doggedly.
the loophole made it a dead letter
I'm not sure what you mean by this. Obviously, it hasn't stopped many companies from paying total compensation in excess of $1 million. But back in 414, you weren't proposing it for that reason (I didn't think), but as a response to Eggplant's question about something like a Gini tax. And compliance with the performance-goal exceptions in 162(m) is definitely enough of a real hurdle that a large number of companies just blow through it and pay the additional taxes rather than trying to structure their compensation schemes to comply with it. Isn't that exactly what you were suggesting?
(Of course, it should still be tightened, and expanded.)
I'm making excuses for why I forgot about it (under the assumption that I must have been aware of it at sometime). Right or wrong, I'm perfectly capable of looking at the bonus loophole, thinking "with a loophole like that, it's not a limitation at all", and forgetting it exists on that basis. This isn't a sane way of handling information, but trust me that it's in character.
Also, how much does it matter if so many corporations pay an effective 0% (or close to) tax rate?
I'm perfectly capable of looking at the bonus loophole, thinking "with a loophole like that, it's not a limitation at all"
Well, right, but the issue is whether it's being viewed as a limitation (which is isn't, in any real sense) or a tax (which is it, although it's far from perfect).
It occured to me the other day that corporate tax loopholes (which is to say tax credits) fund close to 100% of the affordable housing in the country these days. Which is not to say that corporations paying 0% effective income tax is good, or that funding affordable housing through tax credits is good, or that raising corporate income taxes would be bad. I could easily be convinced that all three are just the opposite. But it's a wrinkle that hadn't occured to me before, and should have.
444: You keep on missing the "this is not a sane way of handling information" bit of the comment. I'm not making an argument about it, just trying to figure out why I drew a blank on the existence of the provision.
445 -- At the risk of being branded, yet again, as the implacable foe of reform, this is the sort of thing that makes monkeying around with the tax code really dangerous. IIRC, the 1986 tax changes had devastating effects in some sectors, and because everything is tied together, in ways lots of people don't understand that well, rippling serious impacts outwards.
PGD probably knows this better, among others of you.
Not sure what you're saying in 447 Charlie. Are you saying you don't like the LIHTC (is it one of the 1986 changes you characterize as "devastating"?).
IMO the complexity and interdependence of the tax code make it a mediocre instrument for doing social policy, even though we have become more and more dependent on working social programs through the tax code. (It works much better politically than other avenues). E.g. the value of LIHTCs drops during recessions just when you would want them to rise, because business has less need for tax credits.
IMO the complexity and interdependence of the tax code make it a mediocre instrument for doing social policy
Are you saying the 9-9-9 plan won't save America?
I favor a 6-6-6 plan.
Didn't mean to say tax policy can't be good at the kind of social policy it's intended to do, namely redistributing income / fairly allocating the burden of government.
a large number of companies just blow through it and pay the additional taxes
Maybe a large number, but a small percentage.
Adding to PGD's 435, not only do options involve some funky accounting, but they also tend to involve much higher pay for execs. Unintended consequences!
Maybe a large number, but a small percentage.
Maybe we have different definitions for "small". This research is from 1997, so is obviously old and oudated, but at that time 61% of companies with non-qualified compensation in excess of $1 million had taken action to preserve deductibility. (Meaning 39% hadn't.) And my sense is that those numbers would have come down (up) since that time, for a number of reasons (e.g., (1) according to that study, 21% of the companies that complied at that time were doing so through deferred compensation arrangements that would not longer work, thanks to IRC 409A (added in 2004); (2) both the IRS (through new regulations) and many institutional shareholders groups have made compliance with the performance-bonus exemptions much more of a headache than it was initially.)
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